Mid-Day Gold & Silver Market Report – 5/17/2011
RISK OF DEFAULT IN GREECE IS RISING – The arrest of Dominique Strauss-Kahn, head of the International Monetary Fund, has increased the probability that Greece could either default or be forced to re-structure their debts. Strauss-Kahn has been a major force in coordinating the actions amongst the European nations and the loss of his leadership means a much less cooperative and coordinated effort to assist Greece. It is clear that many banks across Europe hold large amounts of Greece’s debt, it is not as clear how much might be owned by financial institutions in the US. Any default or restructure could result in substantial losses for these banks.
The US Stock Market is down triple digits to a one month low, as new data initiates more doubts how the economic recovery in the US and worldwide. oil prices are lower on these decreased recovery expectations. The euro continues to fall based on increasing concerns about the Greek bail out, so the US dollar has gone up relative to the euro…sending precious metal prices slightly lower. Precious metal prices are see-sawing between their negative correlation to the US dollar vs. their positive correlation to increases in global risk.
At 12PM (CT) the APMEX precious metal prices were:
- Gold price - $1,481.70 (down $10.40)
- Silver price - $33.63 (down 60 cents)
- Platinum price - $1,762.20 (up $1.20)
- Palladium price - $720.50 (up $3.00)